The government of the Bahamas has decided to implement a **debt swap** that will not only save them around 124 million dollars, but will also allow them to **improve ocean conservation** and the management of their **Protected Areas System**.
This debt swap was approved by the **Inter-American Development Bank (IDB)**, in conjunction with the Nature Bonds Program of *The Nature Conservancy* and other partners, so that the Bahamas could take a significant step towards **financial and environmental sustainability**.
This program allowed the government to repurchase $300 million of external debt using funds from a new loan of the same amount granted by Standard Chartered Bank. As part of the project, work will be done to create an endowment fund that will grow to reach $20 million by 2039, ensuring **continuous funding for marine conservation initiatives** even beyond the 15-year duration of the program.
The funding is backed by a solid guarantee structure, which includes $200 million from the IDB, a co-guarantee of $70 million from Builders Vision, and a $30 million credit insurance from AXA XL. The resources generated will be **managed by the Bahamas Protected Areas Fund**, with financial advice from Rothschild & Co.
## A pioneering model in conservation and sustainable development
Since the creation of the Exuma Land and Sea Park in 1958, the Bahamas have been at the forefront of **marine conservation in the region**. In this sense, Rochelle Newbold, Director of the Country’s Climate Change and Environment Unit, stated that this new project strengthens **protected area management programs**, safeguards livelihoods, boosts the economy, and **contributes to global objectives for ocean protection**.
Furthermore, the project will finance key initiatives such as the management of marine protected areas with climate change-adapted plans and the development of a national plan for mangrove management. These measures will help **preserve essential habitats** such as coral reefs, seagrass beds, and mangroves, protecting biodiversity and promoting resilience to climate change.
## A comprehensive approach to sustainability
The IDB, in addition to providing $200 million in guarantees through the debt swap, is working on strengthening the institutional capacity of the Bahamas in environmental and public debt management. For this reason, the support will contribute to improving the country’s macroeconomic stability, optimizing its environmental governance, and advancing in the implementation of the **Blue Economy, with a focus on sustainable development of marine resources**.
On the other hand, TNC’s Nature Bonds program combines debt refinancing with **conservation commitments, scientific planning, and technical assistance** to generate funds for **mitigation and adaptation measures to climate change**. As a result, Jennifer Morris, CEO of TNC, highlighted that the project will help the Bahamas achieve its conservation goals, as well as support sustainable livelihoods, demonstrating that debt swaps are an effective tool to boost investment in nature.
## A replicable debt swap model for Latin America and the Caribbean
The IDB, with its experience in innovative financial projects in the region, played a key role in facilitating collaboration between partners and structuring a credit enhancement model. This contributed to seeking donors and insurers, **maximizing resources available for conservation**.
“We are proud to implement innovative approaches that allow our countries to advance their sustainable development goals,” said Ilan Goldfajn, President of the IDB. “This project reinforces the Bahamas’ efforts to **sustainably manage their marine and coastal ecosystems**, advance their Blue Economy agenda, and strengthen their climate resilience.”
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